Credit: Inside The MagicAs April lingers closer and closer, the Walt Disney Company, in its biggest proxy battle, now appears to be selling votes to certain Disney guests. Here’s what you need to know to see if you qualify to buy one of these votes.
The Walt Disney Company Selling Votes Ahead of Board of Directors Proxy Battle
The ongoing Disney proxy battle intensifies, potentially presenting an opportunity for ordinary shareholders to capitalize on the outcome. Nelson Peltz’s Trian Fund Management, in collaboration with former Disney executive Ike Perlmutter, and Blackwells Capital are vying for board seats in opposition to Disney CEO Bob Iger, with the voting slated to occur at the annual shareholder meeting on April 3.
Disney’s stock performance is central to the dispute, which has seen a significant decline of approximately 66% from its peak in 2021, prompting discussions on strategies to rejuvenate it. This proxy fight is not between Walt Disney Imagineering, 21st Century Fox, the Walt Disney Studio, or any Disney park.
Both activist investors are leveraging public platforms to assert their positions. Trian has released a comprehensive 100-page white paper accessible through a dedicated website, restorethemagic.com, while Blackwells has presented its arguments on its official voting website.
In response, Disney has initiated countermeasures, including featuring Donald Duck’s uncle, Ludwig Von Drake, in a video to educate shareholders on voting for its proposed board slate.
Furthermore, small-scale investors are being courted for their votes through the Shareholder Vote Exchange, an emerging marketplace facilitating auctions for proxy votes. With individual investors owning over one-third of Disney’s 1.8 billion shares, well above the industry norm, this outreach underscores the significance of retail shareholder participation.
Shareholder Vote Exchange recently witnessed a substantial bid of up to $100,000 for 500,000 proxy votes, representing a noteworthy development. Although bidders’ identities remain confidential, the bid originates from an existing shareholder. Notably, Trian and Blackwells have not commented on their potential involvement in the bidding process.
While the ethical implications of purchasing shareholder votes are subject to debate, the practice remains legal. Shareholder Vote Exchange positions itself as a platform enabling retail investors to monetize their voting rights, albeit with uncertain implications for the outcome of Disney’s board vote. Disney has been dealing with quite a few things this year, including the public domain release of Steamboat Willie, the merge with 20th Century Fox kicking off, still cleaning up the mess left by former CEO Bob Chapek, and, of course, Ron DeSantis.
Despite these developments, the ultimate impact of Shareholder Vote Exchange on the board’s decision remains uncertain. As the annual meeting approaches, the dynamics of the proxy battle may evolve, potentially influenced by additional votes offered for sale on the platform.
Steven Xu, co-founder and chief operating officer of Shareholder Vote Exchange, acknowledges the significance of the Disney proxy battle, underscoring shareholders’ widespread interest and emotional investment in the company. Amidst the high stakes and multifaceted interests at play, the outcome of the proxy battle remains uncertain, reflecting the complexities inherent in corporate governance and shareholder activism.
What are your thoughts on Disney selling votes ahead of the Board of Directors meeting in April?